Growth means an increase in the productive capacity of an economy over time. It can be measured, rather crudely, as the rate of change of GNP per head of the population. This measure, however, is subject to all the criticisms of the concept of GNP itself. It may not necessarily mean that more consumer goods are available; the extra capacity may be used to produce further capacity or simply to put a man on the moon. Nor does it allow for social costs involved in producing and consuming or for changes in the quality of goods, leisure time or other elements of the ‘quality of life’.
KeywordsFull Employment Price Stability Output Capacity Money Income Marginal Propensity
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